Fluctuating Natural Gas Prices Are Not A Threat To The Power Grid

As we enter the throes of winter, a number of unique factors have accrued resulting in an eventful November for natural gas prices. The price surge last month exceeded the expectations of analysts, prompting some to renew calls for policies to prop up less competitive generation sources.

Just last week, former Missouri Public Service Commissioner Terry Jarrett argued in an editorial that “shortages of natural gas could push the power grid to the limit” if something isn’t done to protect baseload generation, specifically keeping coal and nuclear power plants from closing. Jarrett noted this winter’s early cold snap to revisit the Bomb Cyclone event from January that saw temperatures on the East Coast plummet to near zero.

Unfortunately, proponents of government intervention in the free market are misinterpreting common fluctuations in the natural gas market to make the argument that coal and nuclear generation are somehow more reliable and resilient sources of electricity and therefore should be eligible for special cost recovery measures proposed by the Trump administration.